Opinion: Miners won't accept 1559

Editor's Note: This article comes fromEthereum enthusiasts (ID: ethfans)Editor's Note: This article comes from

Ethereum enthusiasts (ID: ethfans)

Ethereum enthusiasts (ID: ethfans)

, Author: A Jian, reproduced by Odaily with authorization.

The implementation of EIP-1559 raises the prospect that a chain using 1559 will not be able to kill a fork that does not implement 1559 by its own success, because its success will not bring higher fee income to attract miners permanent migration. This is also why miners will not accept 1559. This is not only a short-term reduction in income, but a permanent deprivation of income. (Under PoS, the expropriated ones are the validators.)

Everyone has heard more or less about the debate about EIP-1559. If you know more, you also know that I am one of the few people who has been against and written to express my views.

At this point in time, it may not be possible to discuss EIP-1559 as a policy in a peaceful manner. In all public opinion spaces, the pros and cons are almost at odds with each other. However, the reason for this is that everyone did not discuss the policy itself, but first had a stereotype, and then divided good people and bad people according to the reaction of others to this stereotype; Standing on the side of justice, there is always a way, and there is always power to subdue them.

For example, EIP-1559 is an experience that reduces the amount of ETH issuance and even achieves deflation; deflation is of course a good thing, so those who oppose it are naturally bad people; or although the opponents are not bad people, what is the use of your opposition? The trend is mighty, and your opposition is not only useless, but also a bit stupid; oh, but this proposal will burn the fee income that originally belonged to the miners, so the miners will definitely oppose it, after all, it is a benefit; but you people, I have earned so much, but I don’t want to give up my family for everyone, which shows that I am still not a good person; but, what can you do, can you still fork? What's the use of forking? With the chain of 1559 and the support of the community, it will definitely be more successful. At that time, it depends on whether you want to say it or not, and your body is honest or not.

I just ask a few questions:

(1) Is deflation necessarily a good thing? Are there any conditions?

According to the quantity theory of money, it is true that deflation will lead to an increase in the purchasing power of money. The problem is that how to achieve deflation is not an irrelevant question. Like the EIP-1559 proposal, the speed of deflation is not fixed; that is, the increase rate of ETH itself will become unstable; this instability will bring great obstacles to the operation of the currency market, just as expected Just as unexpected inflation affects money markets, causing too much investment and insufficient saving, unexpected deflation has the opposite effect. In other words, a good monetary policy should be one in which the rate of issuance is as stable as possible. (Rebuttals are of course welcome)

(2) Will miners definitely oppose the proposal to reduce miners' income?

I think if you initiate a proposal to reduce block rewards, it will also reduce the income of miners, but the differences will certainly not be as big as EIP-1559. There will not even be any disagreement, and everyone will accept it directly. At most, a fundamentalist like me will complain about how ETH's monetary policy has not stabilized.

One of the most common fallacies when discussing 1559 is to say, "This is just a 50% reduction in miners' income", which is not true. This is not the same as lowering the block reward at all. The essence of 1559 is to ensure that when miners provide gas, their income is only related to their marginal cost through dynamic operation; The income has nothing to do with the miners, and all will be burned. This isn’t just about reducing miners’ income, it’s about depriving miners of the opportunity to benefit from Ethereum’s success.

Therefore, this is not only a short-term interest consideration as stated in F2Pool’s public statement, on the contrary, the income related to the handling fee is the longest-term, longer than the block reward.

(3) Miners, even if you have the guts, do you have the ability to fork? Can you still mine the ETH that implemented 1559?

Oh, you are right this time. Miners will also mine the ETH that implements 1559, for sure, but they will fork and they will use the machine gun pool.

Let me explain it with a picture:

This picture can explain many things, including what the supporters of EIP-1559 claim, because the constantly adjusted Base Fee can create a half-full block, so the price that determines whether a transaction can be included in the block, in addition to the Base Fee In addition, it is the marginal cost of the miner, not the bids of other users. The marginal cost of miners is more stable and predictable than the bids of other users, so it can improve the user experience. (I agree with what they call the "half-full block" effect, but I don't think the marginal cost of the miner is easy to predict, that is, I don't think this method can really provide a qualitative improvement. But, how to say, In fact, many supporters do not understand how this point of view is justified.)

what does that mean?

However, did you find out that during the entire adjustment process, the price obtained by the miners has always been the lower side (P2\P3\P4) of the green graph (that is, the amount of ETH burned), and the Gas evaluation is irrelevant.

In other words, assuming that Ethereum is very successful and users are willing to pay double the price per unit of Gas, can miners get more fee income? No, because the difference between the user's valuation and the miner's marginal cost will be swallowed by the Base Fee.

what does that mean?

This means that if there is another forked chain, 1559 will not be implemented; regardless of the difference in block rewards, miners may get the same fee income when mining these two chains. See below:

In the case of the forked chain shown on the right, it has no users, so the blue demand curve is very far to the left, indicating that users have a low evaluation of the unit Gas. However, the fee income of miners is the same as the income of the left picture (1559 chain with more vigorous demand), which is the triangle below the TIP line and above the marginal cost curve.

That is to say, assuming that there is an Ethereum fork chain now, the one with 1559 and more users will not be able to kill this fork chain with its own success; because its success has nothing to do with the miners, no It will bring overwhelming benefits to miners, so miners will not give up this forked chain. Miners will only allocate computing power in near real time based on the value of block rewards on these two chains, which is what we know as a smart pool. And every time the users on this forked chain increase by one point, the advantage comparison of the two chains will be reversed by one point.

I will not deny that it is very likely that this chain with 1559 will have a higher currency price. After all, the cryptocurrency on the forked chain may be smashed.

But, ask yourself, what good does this do for Ethereum? A group of people swear that EIP-1559 will bring higher security and can stabilize the fluctuation of Ethereum mining computing power. As a result, Ethereum may fall into greater fluctuations in computing power. This is the unintended consequence of fatal conceit.

We often say that the income of miners determines the security of a chain, but it is paradoxical to support a policy that will always limit miners to block rewards as their main income. Similarly, users of Ethereum are unaware that they are quietly deprived of the right to buy more security by paying a higher price. On a chain that implements 1559, the cost when the user sends a transaction can still determine whether his transaction is at the front or the back of the block, but this price cannot buy security.

(“How do I know you’re right?” “Use your reason.”)

Finally, will Ethereum fork?

As far as I know, none of the critics of 1559 sincerely hope that Ethereum will fork, no one really thinks that war is a good thing, and no one likes the entire ecology to fall into chaos. On the contrary, those who support 1559 talk more about the fork, which means "forgive you and dare not".

From my personal point of view, I don't know how to eliminate this atmosphere that pervades the Ethereum community: on the one hand, I believe that miners are a group of immoral people who only want to make themselves happy, regardless of what happens to others; The final result of social operation is purely determined by power, so as long as there is a certain person or group powerful enough, they can subdue this group of immoral people and force them to submit and make concessions.

I will not discuss here whether miners are responsible for many user experience problems. I discuss the latter: Is the operation of a society really determined by forces? In other words, whoever has power can do whatever he wants? Or, can power plus wisdom transform society and make it progress? My answer is no.

The most important lesson we have learned from the social sciences, and especially from economics, is that we cannot change the mechanisms of society to our liking without bad consequences. It seems that the planned economy cannot be implemented not because everyone's moral level is not high enough, but because they lack enough information to make reasonable decisions.

In a confrontational atmosphere, it is easy for everyone to fall into the pleasure of driving the enemy into a corner, without thinking about the price they have to pay. However, no group or person is the enemy of the wrong policy. Eliminate them does not make things better; the real enemy of bad policy is economic law.

However, it may be useless to say these words. Ethereum is still likely to fork, because people are unwilling to give up a policy that seems to be good, let alone give up their prejudices against another group.